Hot Growth in a Cold Market

By Barbara Rudolph

Does America need 1,600 different varieties of frozen desserts? The answer to that weighty question is a resounding yes. Responding to an apparently insatiable consumer appetite for exotic frozen concoctions, U.S. food companies are producing a dazzling array of new products, from fruit bars and candy-coated ice cream to soft-frozen yogurt and brownie bars. In the process, the size and diversity of the $1.6 billion frozen-novelty market have grown spectacularly. That category includes all frozen desserts sold in individual portions, which have nearly doubled their sales in the past five years. The industry's burgeoning roster of competitors, which spend heavily to promote their products, ranges from one-product ventures like North Carolina-based Fruitiki to such giants as Nestle and Pillsbury.

The freezer boom is being powered by the increasing presence of grownup appetites in a market traditionally associated with children: most frozen snacks are now bought by the free-spending, sweet-toothed 25-to-44 age group. Among the favorite treats of these young adults are the frozen fruit and juice bars, supermarket items made essentially of water and natural fruit chunks or juice. Sales of the bars jumped nearly 50% last year, to more than $300 million. Frozfruit, a small company based in Gardena, Calif., introduced the first frozen fruit bar nationally eight years ago. But the novelty did not catch on until Dole Food (1986 revenues: $1.7 billion), a division of Castle & Cooke, started selling its own fruit-juice bars three years ago. Frozfruit bars ($2.49 for a box of four) contain chunks of strawberries, pineapples or bananas, while Dole Fruit 'N Juice bars ($2.59 for six bars) come in five flavors, including raspberry and pina colada.

Alongside the frozen-fruit desserts at the supermarket is another innovation: frozen diet-drink bars. The new products got a boost seven months ago from a Food and Drug Administration ruling that allows manufacturers to use Nutrasweet low-calorie sweetener in frozen desserts. As a result, General Foods' Crystal Light frozen diet-drink bar, which contains 14 calories and comes in eight flavors, including pink lemonade, could be a strong seller this summer at $1.89 for a package of six.

For snackers who do not care about calories or cholesterol, Carnation now offers Heaven ice-cream snack bars. Among the four flavors is caramel nut, which consists of vanilla ice cream coated with chocolate, caramel and peanuts. Price: $2.99 for a box of six. Even more deadly combinations come from Steve's Homemade Outrageous Ice Cream Things of Lindenhurst, N.Y. One kind of Thing consists of a vanilla ice-cream bar containing pieces of Heath toffee candy and dipped in dark chocolate. A single bar sells for about $1.29.

In the novelty ice-cream category, manufacturers have been chasing 1985's chilling success story, the oversize DoveBar, made by an Illinois-based firm owned by Mars. The $2 DoveBar, a stick of premium ice cream dipped in high- quality chocolate, reportedly generated sales of more than $30 million last year. In reply, Nestle Foods last month began selling its rival ice-cream bars covered with white, milk or semisweet chocolate and known as Nestle Premium Ice Cream Bars (price: 99 cents each). Another new competitor is Carnation's Berry Swirls ($2.99 for a box of ten), which mix vanilla ice cream and real berries. Pillsbury's Haagen-Dazs division has also introduced ice-cream bars ($2.49 for a package of three) in such standby flavors as vanilla ice cream dipped in dark chocolate and chocolate ice cream covered with milk chocolate.

In the fiercely competitive climate, food companies are finding that they must advertise aggressively to attract consumer attention. To promote its fruit bars and other products, Dole has signed Pop Singer Kenny Rogers as a pitchman for three years at $17 million. Nestle is reportedly spending $15 million to promote its ice-cream bars.

The glacial cascade shows no sign of ending. At least 120 new frozen desserts will be introduced in the first nine months of this year alone. David Braff, president of Braff & Co., a Manhattan-based consulting firm, estimates that only one in every ten new products will succeed long-term. Says Braff: "It will be survival of the fittest and richest." The American passion for things cold and sweet, though, virtually guarantees that the contest will continue to expand. In fact, sales of the 1,626 U.S. frozen novelty items that exist this year are expected to double by 1990 or so.

With reporting by Mary Jane Horton/Los Angeles and Jeanne McDowell/New York